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Let's make an easy example. ( _1 o7 h% t! B) P
6 f5 X: V c0 I, W0 sSuppose one person bought a house worth 100,000 last year. It's a two bedroom style./ l& O& d2 R9 c+ g# z; W
After one year, he or she decided to sell it out.
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Cost (expense):
) P- [) _, T% d/ ~8 sBusiness tax: 5%*100,000=5000 (please verify)
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Mortgage interest: 5%*100,000=5000 (not only the loan interest you pay the bank, but the interest of inital payment of house should also be accrued)! U* H* t; w0 W0 K
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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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Real estate management fee: 250*12=30001 p7 Q# S' W% z
Total cost: 14000
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- Y# n% p. I. R7 j% d, ZBenefit:& Z, B, n1 R- m; B1 d+ m& Z9 p* \
The saved rental: 350*12=4200
8 ?7 c$ h8 Z7 o P4 ?3 [. N2 yThe rental income from tenant: 350*12=4200
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/ g* Z' D, H! CValue increase: 100,000*6%=6000- K" k3 S J4 o$ a; i
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Total benefits: 144006 ?5 i* [ I" L( p" L( z
So if both purchasing and selling transactions are conducted in one year, just slight gain could be achived. So the edmonton estate market is not worthwhile for short term investment
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! Z5 L# b$ F9 [* Z6 g5 u0 r( D3 v[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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